Invoice Factoring Resources
We are committed to offering the best invoice factoring information on the web-with the small business owner in mind. As business owners ourselves, we understand the trials and tribulations of financing ongoing operations given erratic client payments. But invoice factoring provides a fast and low-risk way to access short-term funding to meet cash flow crunches.
We also provide a voice for invoice financing services of all types (asset-based lending, business line of credit, etc.) and reveal how they can help any type of business-from SMEs to freelancers. These are secured, collateralized types of lending so they may offer lower interest rates and a less-stringent application process. And the interest on the debt may be tax-deductible, resulting in a lower cost of capital.
Of course, if there is too much debt incurred, it could breach an existing debt covenant, either reducing subsequent access to capital or resulting in a credit downgrade.
Invoice factoring remains a relatively unknown option, sometimes with a negative connotation attached. There is still the perception that if a company chooses to begin factoring invoices it is somehow in a dire financial condition.
We argue that factoring can actually improve your financial condition. As an asset sale and not a loan, factoring is a debt-free option to raise capital. Factoring accounts receivable may also provide the net working capital to improve your company’s bottom line.
Invoice Factoring Companies
We offer an extensive list of factoring companies, organized not only by state, but also by industry. We profile a number of industries whose operations often require short-term funding due to temporary cash flow constraints. Common factoring industries include trucking, staffing and manufacturing.
Some factoring companies specialize in one industry-such as trucking, while others are considered generalists. There are pros and cons to each style, but we believe it is important to use a factor that has experience financing a particular industry.
It is very important for a small business to conduct due diligence on any factor they intend on using. There are many invoice factoring companies that are great-others, not so much. We always encourage finding a factoring company located in your state or that specializing in your industry. If you are an import/export business in Florida, you wouldn’t want the services of a generalist factor in a land-locked state such as Colorado.
Invoice Factoring Fees
One of the most important variables when researching factors are the fees. Some might do a bait and switch, meaning they will lure you in with a low or no application fee but then hit you with higher charges elsewhere. It is important to get the fees up front in a spreadsheet. Also, carefully consider whether you want to sign a 12 month contract with a company. If you decide to, make sure you have fully vetted them. We can assist in doing so.
Factoring Company Reviews
In our commitment to help high-growth businesses get the small business funding they need, we offer invoice factoring company reviews on some of the higher profile names as well as shine a spotlight on some hidden gems, some of which are smaller mom and pop shops, which offer personalized service and attractive invoice factoring fees. We review trucking factoring companies such as Apex Factoring, OTR Capital and Fleet One factoring, general factors like Riviera Finance and Bluevine and online factors such as Fundbox.
Invoice Factoring Guide
Our downloadable Factoring Guide offers insider tips and tricks many small businesses overlook. One example is realizing that your business may still be liable for the repayment of accounts receivable-even in a non recourse factoring agreement.
So you may be paying higher factoring fees while the credit risk from the account debtors still exists. If there is a dispute regarding the quality of services received or from a damaged shipment, the non recourse agreement may not hold up.